Missing Women and the Price of Tea in China: the Effect of Sex-specific Earnings on Sex Imbalance∗

Economists have long argued that the sex imbalance in developing countries is caused by underlying economic conditions. This paper uses exogenous increases in sex-specific agricultural income caused by post-Mao reforms in China to estimate the effects of total income and sex-specific income on sex-differential survival of children. Increasing female income, holding male income constant, improves survival rates for girls; while increasing male income, holding female income constant, worsens survival rates for girls. Increasing female income increases educational attainment of all children, while increasing male income decreases educational attainment for girls and has no effect on boys’ educational attainment. (JEL D1, J13, J16, J24, O13) ∗I am grateful to the editors and two anonymous referees for their helpful comments. I thank my advisors Josh Angrist, Abhijit Banerjee and Esther Duflo for their guidance and support; Daron Acemoglu, John Giles, Ashley Lester, Steven Levitt, Sendhil Mullainathan, Dwight Perkins, Mark Rosenzweig, Seth Sanders, David Weil and Ivan Fernandez-Val for their suggestions; the Michigan Data Center, Huang Guofang and Terry Sicular for invaluable data assistance; and the participants of the MIT Development Lunch and Seminar, the Applied Micro Seminar at Fudan University, the SSRC Conference for Development and Risk, Harvard East Asian Conference, and the International Conference on Poverty, Inequality, Labour Market and Welfare Reform in China at ANU for useful comments. I acknowledge financial support from the NSF Graduate Research Fellowship, the SSRC Fellowship for Development and Risk, and the MIT George C. Schultz Fund. All mistakes are my own.